Current through Register 1531, September 27, 2024
(1)
Statement of Purpose; Outline of Topics.
(a)
Statement of
Purpose. Every person subject to taxation under M.G.L. chs. 60A,
62 through 65C; 121A, 138, or 175M, or liable for the collection of any such
tax, or required by provisions of those chapters or of M.G.L. c. 62C to file
information with respect to any such tax, must preserve and maintain permanent
books of account or records, sufficiently accurate and complete to establish
the amount of gross income, deductions, credits or other matters required to be
shown by such person in any return of such tax or information. The Commissioner
may require any person to keep such specific records as he deems necessary to
determine the amount of such person's tax liability under the aforementioned
Chapters as well as those pertaining to any other tax or fee administered by
the Department of Revenue.
Every person required by statute, regulation, letter ruling,
technical information release or by instructions applicable to a tax form, to
keep a copy of a return, schedule, statement or other document, must keep such
copy as part of his records.
Every person filing a claim for credit, refund, or abatement
must retain records of sufficient detail to substantiate such claim.
Every person retaining records required to be retained under
830
CMR 62C.25.1 shall make the records available
to the Commissioner in machine-sensible format upon request of the
Commissioner.
(b)
Outline of Topics.
830
CMR 62C.25.1 is organized as follows:
1. Statement of Purpose; Outline of
Topics
2. Definitions
3. Form of Records
4. Failure to Maintain Adequate
Records
5. Electronic Data
Interchange Requirements
6.
Electronic Data Processing System Requirements
7. Alternative Storage Media
8. Period of Retention
9. Verification of Returns
10. Personal Income Tax
11. Income Tax Withholding
12. Paid Family and Medical Leave
Contributions
13. Corporate
Excises
14. Business
Excises
15. Estate Tax
(2)
Definitions. For purposes of
830
CMR 62C.25.1, the following terms shall have
the following meanings unless the context requires otherwise:
Automated Sales Suppression Devices, Software
Programs. carried on a memory stick or removable compact disc or
accessed through an internet link or through any other means, that falsify the
electronic records of electronic cash registers or other point-of-sale systems
including, but not limited to, transaction data and transaction reports.
See M.G.L. c. 62C, § 35F. These devices are commonly
referred to as zappers.
Commissioner. The Commissioner of
Revenue or the Commissioner's duly authorized representative.
Database Management System. A software
system that controls, relates, retrieves, and provides accessibility to data
stored in a database.
Electronic Data Interchange or EDI
Technology. The computer-to-computer exchange of business
transactions in a standardized structured electronic format.
Hard-copy. Any documents, records,
reports or other data printed on paper.
Machine-sensible Record. A collection
of related information in an electronic format. Machine-sensible records do not
include hard-copy records that are created or recorded on paper or stored in or
by an imaging system such as microfilm, microfiche, or storage-only imaging
systems.
Phantom-ware. Any hidden programming
option that is embedded in the operating system of an electronic cash register
or hardwired into the electronic cash register and may be used to create a
virtual second till, such as a virtual second cash register, or to eliminate or
manipulate transaction records to represent the true or manipulated record of
transactions in the electronic cash register. See M.G.L. c.
62C, § 35F.
Point of Sale or POS
System. Hardware and software used at the point a retail sale is
completed to record and track sales to a business's customers that may be
integrated with accounting modules, including general ledgers, accounts
receivable, accounts payable, purchasing, and inventory control systems. A POS
System may include Database Management Systems, Electronic Data Interchange or
EDI Technology, Machine-sensible Records and similar systems.
Storage-only Imaging System. A system
of computer hardware and software that provides for the storage, retention and
retrieval of documents originally created on paper. It does not include any
system, or part of a system that manipulates or processes any information or
data contained on the document in any manner other than to reproduce the
document in hard copy or as an optical image.
(3)
Form of Records.
The records required by
830
CMR 62C.25.1 must be easily locatable,
organized and in such form as to enable the Commissioner to ascertain whether
liability for tax is incurred, and if so, the amount of liability. In the event
a taxpayer's records are dispersed, disorganized or otherwise kept in such
manner as to make it impossible for the Commissioner to ascertain the proper
amount of tax due without inordinate audit time, the Commissioner may require
the taxpayer to organize and present the pertinent records in such form as to
enable a determination of the amount of any such liability. If the taxpayer is
unwilling or unable to do so, the Commissioner may use any reasonable
alternative method of determining the amount due, including obtaining records
from third parties, to verify any entries, deductions, statements, and credits
on the taxpayer's return.
(a)
Machine-sensible Records. Machine-sensible records
used to establish tax compliance must contain sufficient transaction-level
detail information including the state of origination and destination of
transactions so that the details underlying the machine-sensible records can be
identified and made available to the Commissioner upon request. A taxpayer may
discard duplicated records and redundant information provided its
responsibilities under
830
CMR 62C.25.1 are otherwise met.
(b) At the time of examination, the retained
records must be capable of being retrieved and converted to a standard
format.
(c) A taxpayer is not
required to construct machine-sensible records other than those created in the
ordinary course of business or those required to establish tax compliance as
set out in
830
CMR 62C.25.1(3)(a). A
taxpayer who does not create the electronic equivalent of a traditional paper
document in the ordinary course of business is not required to construct such a
record for purposes of
830
CMR 62C.25.1 provided that:
1. a taxpayer who maintains machine-sensible
records in archive form or off-site in a data warehouse may be required to
retrieve and produce such records, and;
2. a taxpayer who maintains machine-sensible
records in the form of an electronic database may be required to generate
reports from existing data fields maintained in such database, whether or not
such reports are otherwise generated by the taxpayer in the ordinary course of
business.
(4)
Failure to Maintain Adequate Records. The taxpayer
bears the burden of proof with respect to any entry, statement, deduction, or
credit claimed on a tax return. A taxpayer meets that burden by maintaining
adequate records of all such entries, statements, deductions or credits.
Records will be considered adequate if they are complete, accurate, and
accessible such that the Commissioner can quickly confirm the proper amount of
tax due.
Where a taxpayer fails to maintain adequate records, the
Commissioner may determine the amount of tax due by using any information
available and may verify the taxpayer's amount of tax due using third party
sources. The Commissioner may issue administrative summonses pursuant to M.G.L.
c. 62C, § 70 to compel the production of any books, papers, records, and
other data from the taxpayer or other sources.
A taxpayer's failure to maintain complete, accurate, and
accessible records may result in the imposition of penalties under M.G.L. c.
62C, including double deficiency assessment penalties under M.G.L. c. 62C,
§ 28, and other appropriate action provided by law, including the
disallowance of any deduction, credit, and exemption and the addition of any
tax to which the requested records relate.
(5)
Electronic Data Interchange
Requirements. Where a taxpayer uses electronic data interchange
processes and technology, the level of record detail, in combination with other
records related to the transactions, must be equivalent to that contained in an
acceptable paper record. For example, the retained records should contain such
information as vendor/purchaser name, invoice date, product description,
quantity purchased, price, amount of tax, indication of tax status, shipping
details, etc. Codes may be used to identify some or all of the
data elements, provided that the taxpayer provides a method which allows the
Commissioner to interpret the coded information.
A taxpayer may capture the information necessary to satisfy the
requirements of
830
CMR 62C.25.1(5) at any
level within the accounting system provided the audit trail, authenticity, and
integrity of the retained records can be established. For example, a taxpayer
using electronic data interchange technology receives electronic invoices from
its suppliers. The taxpayer decides to retain the invoice data from completed
and verified EDI transactions in its accounts payable system rather than to
retain the EDI transactions themselves. Since neither the EDI transaction nor
the accounts payable system captures information from the invoice pertaining to
product description and vendor name (i.e., they contain only codes for that
information), the taxpayer must also retain other records such as its vendor
master file and product code description lists and makes them available to the
Commissioner in electronic format.
(a)
Requirements for POS Systems. POS systems used by
taxpayers must provide enough detail to independently determine the taxability
of each sale and the amount of tax due and collected. Each POS transaction
record must provide detailed information including, but not limited to:
1. individual item(s) sold;
2. selling price;
3. tax due;
4. invoice number;
5. date of sale;
6. method of payment; and
7. POS terminal number and POS transaction
number.
POS system records must permit the direct reconciliation of the
receipts, invoices, and other source documents with entries in the books and
records and on the returns of a taxpayer.
Users of POS systems must maintain auditable internal controls
to ensure the accuracy and completeness of the transactions recorded in the POS
system including a separate and accessible platform that continually backs up
the POS system's data. The records must provide audit trail details including,
but not limited to;
a. internal
sequential transaction numbers;
b.
records of all POS terminal activity; and
c. procedures to account for voids,
cancellations, or other discrepancies in sequential numbering.
The POS audit trail or logging functionality must be activated
and operational at all times, and it must record any and all activity related
to other operating modes available in the system, such as a training mode; and
any and all changes in the setup of the system. If a POS system lacks storage
capacity or the taxpayer makes a change to a POS system, the taxpayer must
transfer, maintain, and have available in a machine-sensible and auditable form
any data removed from the POS system. In the event that a POS system fails,
crashes, or otherwise loses data or becomes inaccessible, the user of the POS
system must provide contemporaneous documentation from a third-party vendor
describing the cause and duration of the incident, the extent of any necessary
repairs, the scope of the data affected, and which data were salvageable. Where
a user of a POS system fails to maintain proper POS system records as described
by this paragraph, the Commissioner will consider the taxpayer not to have
maintained adequate records and may impose applicable penalties as provided in
830
CMR 62C.25.1(4). If it is
determined that the failure to maintain proper records constitutes a willful
attempt to evade or defeat payment of the tax due, such as where the user
continues to fail to maintain proper POS system records in subsequent audits,
criminal penalties may be imposed pursuant to M.G.L. c. 62C, §
73.
(b)
Prohibition of the Use of Automated Sales Suppression Devices and
Phantom-ware. The use of automated sales suppression devices and
phantom-ware is prohibited. M.G.L. c. 62C, § 35F. A person or entity that
sells or offers for sale an automated sales suppression device or phantom-ware
will be subject to a civil penalty of not more than $25,000 for the first
offense and not more than $50,000 for each subsequent offense. Use of such
systems or any other means of willfully underreporting sales, whether in
connection with the use of POS systems or otherwise, is illegal and will be
subject to the tax evasion penalties of M.G.L. c. 62C, § 73, including a
felony conviction, a fine of not more than $100,000 or $500,000 in the case of
a corporation, or by imprisonment for not more than five years, or both, and
payment of the costs of prosecution.
Any person or entity that sells or offers for sale an automated
sales suppression device or phantom-ware will be subject to a civil penalty of
not more than $25,000 for the first offense and not more than $50,000 for each
subsequent offense.
(6)
Electronic Data Processing
System Requirements. The requirements for an electronic data
processing accounting system are similar to that of a manual accounting system,
in that an adequately designed system should incorporate methods and records
that will satisfy the requirements of
830
CMR 62C.25.1.
(a) Upon the request of the Commissioner, a
taxpayer shall provide a description of the business process that created the
retained records. Such description shall include the relationship between the
records and the tax documents prepared by the taxpayer and the measures
employed to ensure the integrity of the records. A taxpayer shall be capable of
demonstrating:
1. the functions being
performed as they relate to the flow of data through the system;
2. the internal controls used to ensure
accurate and reliable processing; and
3. the internal controls used to prevent
unauthorized addition, alteration, or deletion of retained records.
(b) The following specific
documentation is required for machine-sensible records retained pursuant to
830
CMR 62C.25.1:
1. record formats or layouts;
2. field definitions (including the meaning
of all codes used to represent information);
3. file descriptions (e.g.,
data set name);
4. detailed charts
of accounts and account descriptions;
5. evidence that the retained records
reconcile to the accounting records and to the tax returns.
(c) A taxpayer's computer hardware
or software shall accommodate the extraction and conversion of retained
machine-sensible records.
(7)
Alternative Storage
Media. For purposes of storage and retention, a taxpayer may
convert hard-copy documents received or produced in the normal course of
business and required to be retained under
830
CMR 62C.25.1 to electronic format or other
storage-only imaging systems and may discard the original hard-copy documents,
provided the conditions of
830
CMR 62C.25.1 are otherwise met. Documents
which may be stored on these media include, but are not limited to, general
books of account, journals, voucher registers, general and subsidiary ledgers,
and supporting records of detail such as sales invoices, purchase invoices,
exemption certificates, and credit memoranda. Upon request of the Commissioner,
a taxpayer must provide facilities and equipment for locating, reading and
reproducing any documents maintained on storage-only imaging media and all data
shall be maintained and arranged in a manner that readily permits the location
of any particular record.
(8)
Period of Retention. The records required by
830
CMR 62C.25.1, must be kept so long as their
contents are material in the administration of Massachusetts tax laws. At a
minimum, unless the Commissioner consents in writing to an earlier destruction,
the records must be preserved until the statute of limitations for making
additional assessments for the period for which the return was due has expired;
generally, this is three years after the due date of the return or the date the
return is actually filed, whichever occurs later.
There are a number of situations including, but not limited to
the following, where the three-year limitation on assessments does not
apply:
(a) in case of fraud or failure
to file a required return the Commissioner may assess a tax and examine all
records related to such return at any time;
(b) if an executor, as defined in M.G.L. c.
65C, omits from the gross estate, as reported in the estate tax return, items
which should have been included in the return, and the sum of such items
exceeds 25% of the gross estate reported in the return, the Commissioner may
assess the estate tax and examine all records related to such tax at any time
within six years after the return was filed;
(c) where the taxpayer and the Commissioner
have agreed to extend the time for assessing the tax, records are to be kept
for such additional period;
(d)
records related to a taxable event which will occur in the future, such as
records of property for which a basis must be determined to compute gain or
loss upon disposition, must be retained for three years after the return for
the year in which the disposition occurred was due or was actually filed,
whichever occurs later; and
(e) any
person claiming a refund, credit or abatement shall keep all records relating
to the taxable period involved until final resolution of the claim.
(9)
Verification of
Returns. For purposes of verification of returns, all records
required by M.G.L. c. 62C or
830
CMR 62C.25.1, must be kept, by the person
required to keep them, at one or more convenient locations accessible to the
Commissioner and must be made available in a timely manner for inspection by
the Commissioner at any reasonable time. No taxpayer shall be subject to
unnecessary inspections, examinations, or investigations of his records, and
only one inspection of a taxpayer's general books of account for a particular
tax shall be made for any taxable period, unless the taxpayer requests
otherwise or unless the Commissioner notifies the taxpayer in writing that an
additional inspection is necessary.
(10)
Personal Income
Tax. Every person required to file a personal income tax return
under M.G.L. c. 62C, § 6, and the regulations thereunder, must keep such
records as will enable the Commissioner to determine the correct amount of tax
due. The records of taxpayers required to complete Schedule C (Prolit or Loss
from Business or Profession) must include such permanent books of account, or
records, including inventories, as are sufficient to establish the amount of
gross income, deductions, or other items required to be shown on Schedule C of
the personal income tax return. Such records must be in sufficient detail and
clarity to delineate and support each line item deducted on such Schedule C.
Massachusetts nonresident employees that work for a
Massachusetts employer and who source their income to Massachusetts based on
their proportion of time spent in Massachusetts and time spent elsewhere must
maintain source records adequate to substantiate their amount of time spent
outside of Massachusetts. Examples of source records include, but are not
limited to, detailed work calendars created contemporaneously, employee badge
swipe reports, expense reports, approved timesheets, taxpayer-specific letters
from the taxpayer's employer on the taxpayer's employer's letterhead with an
authorized signature stating the number of days the taxpayer worked in
Massachusetts and elsewhere, and signed telework agreements. The records must
be sufficient to enable the Commissioner to determine how much time the
nonresident employee worked outside of Massachusetts during the year.
Taxpayers receiving a Form 1099-K or Form M- 1099-K must
maintain records sufficient to enable the Commissioner to determine the correct
amount of tax due with respect to the income reported. Such records must
sufficiently establish the amount of gross income, deductions, or other items
required to be shown on the Massachusetts personal income tax return. For each
line item deducted on such return, the records must sufficiently detail and
delineate the deduction.
(11)
Income Tax
Withholding. Every employer required by M.G.L. c. 62B to withhold
Massachusetts income taxes from the wages of his employees must keep the
following records:
(a)
General.
1. the name,
address, occupation and social security number of each employee;
2. the amount and date of all payments of
wages and the period of services covered by such payments, and the amounts of
tax withheld thereon;
3. employees'
statements of tips received
4.
employees' requests to be withheld on the basis of cumulative wages;
5. employees' withholding allowance
certificates (Forms M-4 and W-4);
6. employer's copies of employees' wage and
tax statements (Form W-2); and
7.
copies of all withholding returns.
(b)
Employers with Nonresident
Employees. For an employer that withholds income tax from wages
paid to a non-resident employee based on the employee's workdays in and out of
Massachusetts, payroll and attendance records that accurately reflect the
location from which the employee works. Alternately, the employer may use any
other reasonable method to determine the portion of the non-resident employee's
work performed at locations in Massachusetts, including estimating that portion
based on a certification provided by the non-resident employee if taken in good
faith. Where an employer uses such an alternative method, the employer must
retain documentation to verify the method and if it is relying on employee
certification, the employer must retain a signed statement from the employee
attesting to the number of days the employee worked in Massachusetts or expects
to work in Massachusetts.
(12)
Paid Family and Medical
Leave Contributions. All employers and covered businesses, both as
defined in M.G.L. c. 175M, § 1, and self-employed individuals electing
coverage under M.G.L. c. 175M, must maintain records sufficient to comply with
the requirements of458 CMR
2.00: Family and Medical Leave and
830
CMR 175M.8.1: Administration and
Collection of Paid Family and Medical Leave Contributions. Such
records must include:
(a) The name, address,
occupation and social security number of each employee and covered contract
worker, both as defined in M.G.L. c. 175M, § 1;
(b) The amount and date of all payments of
wages and payments to covered contract workers, including the period of
services covered by such payments, and the amount of Paid Family and Medical
Leave contributions collected and remitted;
(c) The number of employees and covered
contract workers compensated for services throughout the calendar
year;
(d) Copies of employees' wage
and tax statements (Form W-2) and covered contract workers' payments and tax
statements (Form 1099-MISC);
(e)
Copies of all spreadsheets and any other document used to prepare any
employment and wage detail report; and
(f) Copies of all employment and wage detail
reports and any other documents submitted online to the Commissioner through
MassTaxConnect.
(13)
Corporate Excises. Every corporation required to file
a return under M.G.L. c. 62C, § 11 or § 12, must keep adequate and
complete records, including copies of federal and state income tax returns,
schedules used in connection with the preparation of returns, and records
showing source, date and amount of income received or expenses claimed as
deductions. The corporation must also keep information relative to tangible
personal property located in the Commonwealth as to which such corporation is
lessor or lessee.
(14)
Business Excises.
(a)
Gasoline. Every distributor, unclassified importer and
unclassified exporter, as defined in M.G.L. c. 64A (and denominated for
purposes of830 CMR 62C.25.1(14)(a)
as a licensee), is required to maintain:
1. a complete and accurate record of all
sales of fuel, including the name and address of the purchaser, the place and
date of delivery, the number of gallons of each type of fuel
(e.g. unleaded regular, unleaded premium, gasohol and products
sold or used as fuel for aircraft, except aircraft fuel as defined in M.G.L. c.
64J, § 1), and the total price paid for each type;
2. a complete and accurate record of the
number of gallons of each type imported, exported, produced, refined,
manufactured, and compounded and the date of import, export, production,
refining, manufacturing or compounding;
3. a complete and accurate record of the
number of taxable gallons placed in the licensee's own vehicles or in
registered vehicles leased to the licensee.
4. copies of statements delivered with every
consignment of fuel to a purchaser within the Commonwealth containing the date
of purchase, the name of the purchaser, the name of the seller, the number of
gallons of each type of fuel delivered and the total price paid for each type.
Licensees must retain copies of gasoline excise returns
filed.
(b)
Tobacco Products. Every manufacturer, wholesaler,
retailer, vending machine operator, transportation company and unclassified
acquirer, as defined in M.G.L. c. 64C, is required to maintain a complete and
accurate record of all tobacco products, as defined in M.G.L. c. 64C, § 1,
including electronic nicotine delivery systems, as defined in M.G.L. c. 64C,
§ 7E, as well as cigars and smoking tobacco, as defined in M.G.L. c. 64C,
§ 7B, manufactured, purchased or otherwise acquired. Such record must
include copies of statements delivered with sales or consignments containing:
the name and address of the seller, the name, address and federal
identification number of the purchaser, the date of delivery, the quantity
purchased, the trade name or brand and the price paid for each brand. Every
vending machine operator is required to keep a detailed record for each vending
machine owned for the sale of tobacco products showing: the location of the
machine, the date of placing the machine at that location, the quantity of each
brand of tobacco products placed in the machine, the date when such quantity
was placed in the machine and the amount of the commission paid or earned on
sales through such vending machine.
Taxpayers must retain copies of all tobacco product excise
returns filed.
(c)
Special Fuels. Every person licensed as a user-seller
or supplier, as defined in M.G.L. c. 64E, is required to keep a complete and
accurate record of all purchases, sales and use of special fuels. Such record
shall include:
1. an inventory of each type of
special fuels on hand at the beginning and the end of the period of filing a
special fuels excise return;
2. the
number of gallons of each type acquired from all sources during the period
including the date of each purchase or acquisition, the name and address of
each supplier, and the number of gallons acquired from each supplier;
3. the number of taxable gallons of each type
placed in the licensee's own vehicles or in registered motor vehicles leased to
him during the period including the make and type of each vehicle, the odometer
reading of each vehicle, the engine hour reading of each vehicle, the number of
gallons placed in such vehicles from the licensee's own storage or supply and
the number of gallons placed in such vehicles from other sources;
4. the total number of taxable gallons of
each type sold to other users for use in registered motor vehicles during the
period including the name and address of each purchaser and the number of
gallons sold;
5. a written
statement for each sale to user-sellers during the period including the date of
sale, the name of the purchaser, date of delivery, the delivery address, gross
sales price and the number of gallons of each type sold;
6. the total number of non-taxable gallons of
each type sold during the period, including the date of sale, name and address
of each purchaser date of delivery, gross sales price and the number of gallons
sold to each purchaser;
7. the
total number of each type of non-taxable gallons used by the licensee during
the period including the nature of the use, the type of machine using the
special fuel and the number of gallons used;
8. a complete and accurate record of the
number of gallons imported, produced, refined, manufactured or compounded
during the period and the date of importation, production, refining,
manufacturing or compounding; and
9. the gross cost paid as consideration for
liquefied gases (including propane) used by licensed suppliers in their own
motor vehicles and not resold during the period.
Licensees must retain copies of special fuels excise returns
filed.
If any supplier or user-seller not properly licensed pursuant
to M.G.L. c. 64E, becomes liable for the excise under M.G.L. c. 64E, such
person must retain those records which a licensee is required to retain under
830
CMR 62C.25.1.
(d)
Fuels Acquired Outside the
Commonwealth. Every motor carrier, as defined in M.G.L. c. 64F, is
required to keep complete and accurate records of all miles travelled and fuel
used in operations. Such records must specify:
1. the number of miles travelled everywhere,
the number of miles travelled in Massachusetts, the number of miles travelled
on the Massachusetts Turnpike substantiated by toll receipts or daily listing
invoices issued by the Massachusetts Turnpike Authority, the number of gallons
of fuel used everywhere, the number of gallons of fuel used in Massachusetts;
and
2. the sources of fuel
purchased in Massachusetts, including the date of supply, the name and address
of the supplier, the number of gallons of gasoline supplied and the number of
gallons of special fuel supplied.
Motor carriers must retain copies of gasoline and special fuels
excise returns filed.
(e)
Room Occupancy.
Every operator and intermediary, both as defined in M.G.L. c. 64G, § 1,
must maintain records sufficient to comply with the requirements of
830
CMR 64G.1.1:
Massachusetts Room
Occupancy Excise. Operators and intermediaries must retain complete
and accurate records of charges and receipts for all transfers of occupancy
sufficient to determine whether the proper amount of tax and any applicable
fees have been paid. If an occupant claims entitlement to an exemption from the
room occupancy excise, the operator or intermediary must maintain records to
support the exemption.
All operators and intermediaries must retain copies of all room
occupancy excise returns filed.
(f)
Sales and Use.
For purposes of
830
CMR 62C.25.1(14)(f),
"vendor" means vendor as defined in M.G.L. c. 64H, § 1, "purchaser" means
any purchaser as defined in M.G.L. c. 64H, § 1 or M.G.L. c. 64I, § 1
as the context requires, "retailer" means any retailer as defined in M.G.L. c.
64H, § 1, "promoter" means promoter as defined in M.G.L. c. 62C, § 1
and "contractor" means any person engaged in the construction, reconstruction,
alteration, remodeling, or repair of real property.
Every promoter must maintain the following records:
1. a copy of the notice filed with the
Commissioner indicating the date and place of each flea market, craft show,
antique show, coin show, stamp show, comic book show, fair and any similar show
held within the Commonwealth with respect to which he was a promoter;
2. a copy of the promoter registration
certificate issued by the Commissioner; and
3. name, address, and vendor registration
number, by show, of every person whom he permitted to display for sale or to
sell tangible personal property subject to tax under M.G.L. c. 64H at such
show.
Every vendor, purchaser, retailer and contractor required by
M.G.L. c. 64H or c. 64I to file sales or use tax returns shall maintain a
complete and accurate record of the gross receipts/expenditures from all
purchases and sales, whether or not taxable. Such persons shall retain copies
of tax returns filed together with supporting data to indicate how the figures
in such returns were calculated.
Every vendor, purchaser, retailer and contractor must maintain
the following records:
a. a journal or
its equivalent, which records daily all non-cash transactions affecting
accounts payable;
b. a cash journal
or its equivalent, which records daily all cash receipts and cash
disbursements, including any check transactions;
c. a sales slip, invoice, cash register tape,
or other document evidencing the original transaction, which substantiates each
entry in the journal or cash journal;
d. memorandum accounts, records or lists
concerning inventories, fixed assets or prepaid items, except in cases where
the accounting system clearly records such information; and
e. a ledger to which totals from the journal,
cash journal and other records have been periodically posted. The ledger must
clearly classify the individual accounts receivable and payable and the capital
account.
Vendors, purchasers, retailers and contractors who maintain
double-entry or cost accounting systems, or whose total sales volume for the
month for which a return has most recently been filed is in excess of $100,000,
or who maintain machine-sensible records for accounting purposes, must maintain
the following records, or other records which will readily furnish the
equivalent information:
i. evidence of
original transactions: all customer orders, sales invoices, purchase invoices,
credit memoranda, shipping documents, and cancelled checks;
ii. journals: a cash journal or journals,
specifying cash receipts and disbursements (including all check transactions),
a sales journal recording all charge sales, a purchase journal recording all
charge purchases of merchandise for resale or of materials to be incorporated
into a finished product, a voucher register recording all purchases by check of
materials or services, a general journal recording any non-recurrent
transactions, a journal voucher and standard journal recording recurrent
transactions not otherwise accounted for;
iii. ledger and balance sheet records: a
general ledger accounting for every balance sheet and profit and loss item, to
which periodic postings are made, and reflecting totals from the journals; a
subsidiary ledger classifying and detailing all accounts payable or receivable,
expense accounts and any other accounts so recorded; a private ledger; records
concerning fixed assets; depreciation schedules; records of inventories and
transfers; a detailed chart of accounts; and
iv. general records: sales contracts, lease agreements, contractor
bonds and annual auditor's reports.
Every holder of a certificate of exemption from the sales or
use tax must retain a record of each purchase made under the certificate
including the certificate itself, a description of each item purchased, the
name and address of the vendor, the cost of the item and the date of the
purchase.
Every vendor making a sale to the holder of an exempt purchaser
certificate must retain a copy of the certificate, a record of each sale made
under the certificate including a description of each item sold, the price
charged for each item, the date of sale, the name and address of the purchaser,
and the certificate number of the purchaser.
Every vendor making a sale to the holder of a contractor's
exempt purchase certificate must retain a copy of the certificate, a record of
each sale made under the certificate including a description of each item sold,
the price charged for each item, the date of sale, the name and address of the
purchaser, and the contract number or other identifying designation of an
unnumbered contract. The contract number or other identifying designation must
appear on all purchase orders and invoices.
Every vendor making a sale to the holder of an exempt use
certificate must retain a copy of the certificate, a record of each sale made
under the certificate including a description of each item sold, the price
charged for each item, the date of sale, the name and address of the purchaser
and purchase orders which clearly indicate that they represent exempt use
purchases.
Every vendor making a sale to the holder of a resale
certificate must retain a copy of the certificate, a record of each sale made
under the certificate including a description of each item sold, the price
charged for each item, the date of the sale, the name and address of the
purchaser-vendor, the registration number of the purchaser-vendor, and the
business of the purchaser-vendor.
Every motor vehicle dealer must retain copies of his reports of
sales of motor vehicles and trailers (Form MV-DL) and accompanying
documents.
In addition to other records of vendors required by this
regulation to be retained, every vendor of aircraft, boats and recreation or
snow vehicles must keep copies of Form ST-6, (Certificate of Payment of Sales
or Use Tax).
(g)
Marketplace
Facilitators. Each marketplace facilitator, as defined in M.G.L.
c. 64H, § 1 and
830
CMR 64H.1.9: Remote Retailers and
Marketplace Facilitators, must maintain records sufficient to comply
with the requirements of
830
CMR 64H.1.9. Such records must be sufficient
to determine whether the proper amount of tax has been paid. Marketplace
facilitators must also maintain any other records required under
830
CMR 62C.25.1(14)(f) where
applicable.
(h)
Sales
and Use-meals. Every vendor of meals, as defined in M.G.L. c. 64H,
§ 6(h), is required to maintain complete and accurate records of all sales
of meals and alcoholic beverages, and all sales of non-taxable food and
beverages. The records must include cash register tapes, alcoholic beverages
bar checks, dining room meals checks, and a daily receipts book or record.
Vendors must retain copies of sales tax on meals returns filed.
Every vendor of meals making a sale to the holder of an exempt
purchaser certificate must retain a copy of the certificate, a record of each
sale made under the certificate including a description of each item sold, the
price charged for each item, the date of sale, the name and address of the
purchaser, and the certificate number of the purchaser.
Every vendor of meals making a sale to the holder of a resale
certificate must retain a copy of the certificate, a record of each sale made
under the certificate including a description of each item sold, the price
charged for each item, the date of the sale, the name and address of the
purchaser-vendor, the registration number of the purchaser-vendor, and the
business of the purchaser-vendor.
(i)
Alcoholic
Beverages. Every licensee subject to the excise on alcoholic
beverages under M.G.L. c. 138, § 21 must keep and preserve a complete and
accurate record of all alcoholic beverages, alcohol and malt beverages
manufactured, distilled, bottled, imported, purchased or sold within the
Commonwealth or exported from the Commonwealth. Such records must include: the
total number of gallons, by brand, the price or prices paid for each brand, the
name and address of the purchaser to whom sold or vendor from whom purchased
and the date of the purchase or sale. Licensees must retain copies of alcoholic
beverages excise returns filed.
(j)
Deeds. Every person liable for payment of the excise
on deeds, instruments or writings under M.G.L. c. 64D, must keep such adequate
and complete records as to allow the Commissioner to ascertain that the proper
amount of the excise has been paid. Such records shall include books, papers or
memoranda bearing upon the amount of excise owed the Commissioner. These
records need be preserved for only two years from the date of
conveyance.
(k)
Aircraft Fuel. Every person licensed as a user-seller
or supplier, as defined in M.G.L. c. 64J, § 1, is required to keep a
complete and accurate record of all purchases, sales and use of aircraft fuel.
Such records shall include:
1. a complete and
accurate record of all purchases, sales and use of aircraft fuel, including the
name and address of the person accepting delivery of said aircraft fuel to be
used in an aircraft in the commonwealth, its place and date of delivery, and
the gross sales price or cost;
2. a
complete and accurate record of the number of gallons imported, produced,
refined, manufactured or compounded and the date of the importation,
production, refining, manufacturing or compounding; and
3. a written statement for each sale
containing the date of the sale, the name of the person making delivery and the
name of the person receiving the same; and
4. a completed certificate of exemption (Form
JFT-8) for all exempt sales. Licensees must retain copies of all aircraft fuel
excise returns filed.
(l)
Abandoned Deposit Amounts. Every bottler or
distributor maintaining or required to maintain, a Deposit Transaction Fund, as
required by M.G.L. c. 94 is required to keep a complete and accurate record of
all transactions affecting the Deposit Transaction Fund. Such records shall
include the number of non-reusable beverage containers for which refund values
have been received or for which refund values have been paid, interest income
earned on amounts held in the Deposit Transaction Fund, and beginning and end
of month fund balances.
Bottlers and distributors required to maintain Deposit
Transaction Funds must retain copies of Abandoned Deposit Amounts
returns.
(m)
Convention Center Financing Surcharge. Operators of
sightseeing tours, operators of parking facilities in a convention center
facility in Boston, Springfield, or Worcester, and vendors with customers that
sign vehicle rental contracts subject to the surcharge imposed under St. 1997,
c. 152, the Convention Center Act, are required to keep complete and accurate
record of all sales subject to the surcharge. Such records shall include the
following:
1. a complete and accurate record
for all sales of tickets, parking, and all vehicle rental contracts subject to
St. 1997, c. 152, the Convention Center Act; and
2. supporting data that indicates how the
amounts of the surcharge reported in the returns were calculated.
Taxpayers must retain copies of Convention Center Forms
filed.
(n)
Ferry Embarkation Fee. Every ferry operator subject to
the provisions of St. 2003, c. 55 is required to maintain compete and accurate
records regarding passenger embarkation from each port town voting to impose
the embarkation fee. Such records shall include:
1. the total number of fee passengers
departing from each port town;
2.
the number of such passengers using tickets purchased as commuter
fares;
3. the number of such
passengers using tickets purchased at school-related rates; and
4. the total embarkation fees collected.
Taxpayers must retain copies of ferry embarkation fee
returns.
(o)
Uniform Oil Spill Fee. Every marine terminal operator
registered under M.G.L. c. 21M, must keep a complete and accurate record of the
receipt of all petroleum products or crude oil at the marine terminal. Such
records must include the name and address of the owner of the petroleum product
or crude oil, the date and the number of barrels of petroleum products received
at the marine terminal and the point of origin shipment. Licensees must retain
copies of the Uniform Oil Response and Prevention Fee form.
(p)
Vehicular Rental
Surcharges. Vendors entering into a vehicular rental transaction
contract in the Commonwealth that is subject to the police training surcharge
imposed pursuant to M.G.L. c. 90, §
327/8 or the surcharge
imposed on such vehicular rental contracts in Revere pursuant to St. 2005, c.
92, are required to keep complete and accurate record of all sales subject to
such surcharges. Records must be sufficient to establish the amount of
vehicular rental surcharge due and indicate how the amount of the surcharge
reported was calculated. Vendors must retain copies of all Vehicle Rental
Surcharge returns filed.
(q)
Direct Broadcast Satellite Service Excise. Each direct
broadcast satellite service provider required to collect and remit the excise
imposed under M.G.L. c. 64M, § 2, must maintain business records
sufficient to determine whether the proper amount of tax has been paid. The
records must include a breakdown of any amounts excluded from gross revenues
pursuant to M.G.L. c. 64M, § 1. Direct broadcast satellite service
providers are required to retain copies of all Monthly Satellite Service
returns filed.
(r)
Marijuana Excise. Every marijuana retailer, as defined
in M.G.L. c. 94G, § 1, must maintain complete and accurate records as
required by
830
CMR 64N.1.1: Marijuana Retail
Taxes, as well as any other records required under
830
CMR 62C.25.1(14)(f) where
applicable. Marijuana retailers must retain copies of all Marijuana Retail Tax
returns filed.
(15)
Estate Tax. An executor as defined in M.G.L. c. 65C,
must keep such complete and detailed records of the affairs of the estate for
which he acts as will enable the Commissioner to determine the amount of the
estate tax liability. The executor must furnish pertinent records upon request,
including:
(a) copies of any documents
relating to the estate which are on file in any court having jurisdiction over
the estate;
(b) appraisal lists of
any items included in the gross estate;
(c) copies of insurance policies on the
decedent's life;
(d) copies of
instruments which transferred the decedent's property within three years
preceding his death;
(e) copies of
trust instruments in which decedent had an interest, including powers of
appointment;
(f) copies of federal
estate and gift tax returns and any documents required to be submitted to the
Internal Revenue Service in connection with them;
(g) copies of balance sheets, profit and loss
statements and other pertinent financial records relating to the value of
closely-held businesses owned by the decedent;
(h) copies of documents which verify
deductions taken on the estate tax return; and
(i) available copies of the decedent's
federal and state income tax returns.
